High oil prices drove up car sales last year but demand may dip as pump prices drop
Christopher Tan, Straits Times 5 Feb 09;
COMPRESSED natural gas (CNG) vehicle sales had a boom year, as soaring petrol prices in the first half of 2008 pushed more people towards alternatives.
But industry observers said interest may be waning, as pump prices have since softened.
By the end of last year, there were 2,444 cars which can run on CNG, 10 times the population in 2007. Taxis which run on CNG proliferated too, with their numbers rising by more than four times to 977 units.
The switch to CNG vehicles - deemed to be environmentally cleaner than many petrol and diesel models here - has also begun to spread to buses and trucks.
Ten-League Investments has sold the first CNG prime mover here, a six-axle vehicle which can haul 40-foot containers.
Ms Foo May Ling, a partner in Ten-League, claims the China-made truck is far cleaner than diesel trucks.
'You can stand behind it when the engine is running,' she said of its near non-existent exhaust fumes. 'For a diesel prime mover, the moment the engine is turned on, you'll get out of the way.'
The first truck has been sold to CNG refuelling station operator Smart Energy, which will use it to transport gas to its new kiosk in Serangoon North. The station is expected to open next month.
The first CNG buses have also been delivered here. King Long Singapore, which imports the China-made King Long CNG coaches, has sold the 30 buses to two tour operators here.
Mr Charles Tan, a director of King Long Singapore, said lower running cost has become less of a reason for switching to gas since petrol and diesel prices started to fall in the second half of last year.
But he said CNG buses are cheaper than diesel models, partly because of a green vehicle rebate. His CNG coach costs $150,000 compared to $180,000 for a diesel equivalent.
'How successful CNG is depends on how much the Government is willing to support it,' he said.
Last fortnight during the Budget announcement, the Government said it will tax CNG at the pumps - the way petrol is taxed - from 2012. It will start off with a levy of 20 cents per kg.
It also said CNG cars will continue to be granted the green vehicle rebate till end-2011. This rebate is equivalent to a 40 per cent registration tax cut for cars, and 5 per cent for commercial vehicles.
Motorist Melvin Toh, 27, said the changes are likely to dampen the demand for CNG cars after 2011. 'The key benefit is the 40 per cent rebate,' said the wealth manager, who drives a CNG Honda.
Yesterday in Parliament, Nominated MP Edwin Khew, who is chairman of the Sustainable Energy Association of Singapore, asked the Government to consider more breaks for CNG vehicles, which he said helped lower the amount of fine soot in the air.
These include not levying a duty on CNG till 2015, and providing incentives for those who invest in CNG stations.
Mr Khew pointed out that consumers became less keen on CNG towards the end of last year because of falling petrol prices as well as the spectre of a hefty tax that may be levied on gas-powered cars.
He said this had caused 10 out of 20 workshops which convert vehicles to run on CNG to close.
The Budget Statement has brought more clarity to would-be converts.
Mr Gilbert von der Aue, sales manager at CNG retrofitter C. Melchers, said there have been 'a couple more enquiries since the Budget, but we need a few more weeks to have a better gauge'.
He said the opening of two new stations this year will make it more attractive to users as well as those contemplating a switch.
Besides the Serangoon station, a massive facility in Old Toh Tuck Road will improve convenience. Due to open in July, it will have 38 pumps - more than the total at three stations operating today.
Mr von der Aue expects the new stations to lead to lower prices. CNG is now retailing at about $1.20 per kg, or 89 cents per litre.
High petrol prices last year had also fuelled strong demand for hybrid cars. The cohort of petrol-electric cars stood at nearly 2,000 units at the end of the year, 90 per cent more than in 2007. But despite the growth spurts, 'green' vehicles make up less than 1 per cent of the 880,000 vehicles here.
christan@sph.com.sg
